Napster deals point to new services

Napster has struck a deal with music-recommendation company Gigabeat, which could result in a new set of personalized services on the music-swapping network.

In the footnote of a court filing made earlier this week, Napster said
it had struck an agreement by which it may buy the assets of Gigabeat, a music-recommendation
service struggling to stay afloat.

The deal follows other hints about similar new technologies that could be added as a result of the company's relationship with entertainment giant Bertelsmann.

On the other side of the Atlantic, Napster partner Bertelsmann continues
to maintain a subsidiary dubbed "Snoopstar," which at one time had released its own peer-to-peer
file-sharing search engine. That program has since disappeared, but
several of the key personnel at the subsidiary have a background in
developing software that can "learn" from its users' behavior.

It's not yet clear that any of these pieces will ultimately find their
way into the Napster-Bertelsmann subscription music service slated to
replace today's file-swapping free-for-all, or even whether this
subscription service will see the light of day. But the recommendation
technology now circling around its fringes could prove a critical way
for the record companies to make a paid Napster more useful, and more
attractive to listeners than free underground services, analysts say.

"I think this is an essential component of any subscription service,"
said Jupiter Research analyst Aram Sinnreich. "Part of the value of any
paid service is that it will help consumers negotiate the vast library
of music they would suddenly have access to."

The music-recommendation business has launched a handful of music sites
over the past few years. The most mature--and low-tech--of these is
probably Listen.com, which
uses a staff of actual musicians and music writers to listen to online
music to develop categories and recommendations.

Most of the rest, including Gigabeat, MuBu.com, and others, use technology and
feedback from users to determine what new music listeners might like.
Many of the big commerce sites have been interested in this type of
technology for years. Amazon.com has long had several different versions of
this type of service to recommend books to buyers based on past
purchases. Last year, Microsoft bought Mongo Music, one of
Gigabeat's competitors.

Napster wasn't immediately available to comment on the timing or scale
of its relationship with Gigabeat. But in a court document filed Wednesday, the company said it had made a deal that would let it buy
some of the company's assets.

"Napster has separately entered into an agreement whereby it may in the
future acquire certain assets of Gigabeat," the document read.

Gigabeat has been rumored to be on the block for some time. The company
has declined to say anything specific about buyers, other than to
promise "something interesting to say in the near
future."

The Snoopstar link is more tenuous. The company, which Bertelsmann has
said is simply an independent information-technology division of its
conglomerate, was beta testing a peer-to-peer search engine early this
year.

One of the developers of that software, a Mark Essien, also has worked
on software that is designed to learn from the experience of its user,
and from its own actions in a peer-to-peer network. Many of these links
were originally pointed
out by several German language publications.

Bertelsmann says Snoopstar now has "absolutely no relationship" with Napster and that the peer-to-peer project has been fully shut down.

"There is nothing going on along those lines at this moment," said
Bertelsmann E-Commerce Group spokeswoman Melinda Meals.

Working any of these technologies into Napster is contingent on the
service actually staying alive long enough to evolve, of course.

Bertelsmann and Napster executives have said they plan to launch their
subscription service in
July, with all-you-can-eat fees ranging between $5.95 and $9.95 a month.
But the files swapped through the service would likely be in a new,
secure format based on technology created by Bertelsmann subsidiary
Digital World Services, the companies have said.

The success of this subscription model is reliant on other record labels
joining, however. To date, none of the majors outside of Bertelsmann has
taken this step.